Revealed: The cost of being loyal

We all know that you can save money by switching your services, but even so many prefer to stick with their existing company. Yet new research has found the cost of staying loyal to be almost £1,000 a year.

That’s a huge amount of cash which most of us wouldn’t normally ignore. In fact, according to the report by Citizens Advice, the £987 more loyal customers spend is equivalent to four months of food for the average household.

Or it could be used to help clear debts, save towards your holiday or simply just build up a bit of an emergency buffer.

And the way to keep this money for yourself is simple. Be a new customer elsewhere. That’s how you get lower prices for many services including energy, mobile phones, broadband, insurance, mortgages and savings.

Yet many are willing to lose out rather than move. So we’ve taken a look at some of those reasons, and explained why you shouldn’t be scared to switch.

Reasons you might be loyal – and why it’s still better to switch

Loyalty should pay

Sadly it doesn’t as far as most bills go. There are very few loyalty schemes out there which are even close to the benefits you’ll get by moving to a better deal elsewhere.

Remember you don’t owe that company anything. It’s your right to move, especially if it will save you money.

You’re put off moving by your existing company

This was one of the causes the Citizens Advice research found for inertia. Confusing terms and conditions, a lack of notice that contracts are ending and financial barriers all made people stay put.

But there’s an easy way to beat this. When you start any new service, add a note in your calendar a month before the contract ends, or just spend 30 minutes to work them out for existing contracts.

You’re then free to start looking at moving your service without early termination fees, and you won’t move to a more expensive rate without realising.

Better the devil you know?

Lots of people are worried they’d get worse service if they move – and of course that could be the case.

To combat this you just need to do a little research. Check for customer service reviews online or ask your friends who they recommend. Remember cheapest isn’t always best, but you can certainly find better service for less if you’ve never switched.

You can’t be bothered

Ah, apathy. Finding time to do a little financial admin when you could be doing something more exciting (or just chilling out) can be a difficult hurdle. And that’s understandable when our lives are often so busy.

But take a moment to consider just how much money you could save – close to £1,000! It’s well worth putting aside a few hours to get it done.

You find it all too confusing

If you’re every worried about switching or finding a better deal because you just don’t get it – well we’re here to help. There are lots of guides on the Money Advice Service website which will take you through your options and explain what you need to do.